“The Best or Nothing.”
That’s the theme behind the new Mercedes’ subscription program as the automaker thinks of what to offer its customers.
As a result, Mercedes-Benz is experimenting with a subscription-based loyalty program.
In June the company launched Mercedes-Benz Collection, which provides the broadest offering of any luxury automaker for those drivers who prefer the variety and convenience of a subscription service.
A collaboration among Mercedes-Benz USA, Mercedes-Benz Financial Services USA, and Mercedes-Benz dealers gives subscribers to Mercedes-Benz Collection the option to switch between different types of vehicles depending on their needs or lifestyle.
Currently, the service is available as a pilot in two cities: Nashville, TN, and Philadelphia, PA.
There are three tiers in the program: Signature, Reserve, and Premier–with two offered in each city and prices ranging from $1,095 to $2,995 per month (depending on city/level).
Subscribers pay a one-time activation fee of $495 and choose from all the vehicle body styles offered in that subscription tier, including Mercedes-Benz SUVs, sedans, coupes, cabriolets, roadsters, and wagon models. Each tier also allows access to the company’s popular high-performance Mercedes-AMG models.
The Mercedes-Benz Collection works through a combination of the new Mercedes-Benz Collection app and a local concierge.
Once subscribed, customers initiate vehicle exchanges, concierge communication, and other actions via the app. Concierge staff ensures that the delivery is consistent with the details and preferences in the customer’s profile.
Subscribers can access any type of vehicle within their tier with no mileage limitations. The monthly subscription fee for the tier also includes insurance, 24/7 roadside assistance, and vehicle maintenance.
We spoke to Craig Walters, General Manager, Mercedes-Benz Financial Services, to learn a bit more about this exciting new program.
Jim Tierney: Can you talk about Mercedes’ thought process behind launching this subscription service and what the goals are for it from a customer engagement/customer loyalty perspective?
Craig Walters: Certainly buying is the traditional business model, but given that our priority is to provide a “Best or Nothing” customer experience, we want to make sure that we’re tailoring our offering to our customers’ needs and wants.
The reality is that subscription services for just about everything are on the rise and we want to stay in step by bringing to market services that people are interested in. It allows members to subscribe and extend their garage of vehicles significantly, with broad access to our extensive line-up.
Mercedes-Benz Collection is designed to be a lifestyle solution that contributes to the overall loyalty of customers to the Mercedes-Benz brand.
Jim: Did you survey your customers prior to this launch?
Craig: We did survey some current customers and found that there was less awareness about the subscription market as it relates to automotive.
However, subscription is gaining general market acceptance in a number of different industries like food delivery, clothing, and music. We see this as a way to attract new customers to the brand who may not have experienced our vehicles before.
What we can offer is a luxury vehicle experience that allows a customer to choose the offering that best suits their lifestyle today, with the flexibility to easily modify that in the future.
Jim: Premium, or paid, loyalty programs and subscription service programs are gaining momentum in the loyalty market. Can you talk about why Mercedes’ officials believe this is a good fit for its customers?
Craig: We have the most diverse product offering in the luxury market. We think there are quite a few people out there who would like to experience several of our products, as opposed to just one over the course of a traditional lease or finance term.
Other people prefer not to deal with the requirements and maintenance that come with ownership, and this is as simple as downloading an app, articulating your needs, and taking delivery.
Jim: So many brands are rethinking customer loyalty today, given heightened consumer expectations. Can you talk about Mercedes’ approach to customer loyalty?
Craig: For the better part of the past two decades, providing a world-class customer experience has been at the top of the priority list for MBUSA.
The credo for our product is “The Best or Nothing” and our goal is to provide that same level of excellence in the ownership experience. Today, we have the highest owner loyalty of any of our core competitors.
We believe that the quality of the ownership experience in tandem with always staying ahead of customer expectations (e.g. Mercedes-Benz Collection) is the key to loyalty and, by extension, to the performance of the brand.